The Week Ahead May 25-29, 2015 QE — Rotating, Not Accelerating Growth by Andrew Grantham Economics Avery Shenfeld (416) 594-7356 [email protected] Benjamin Tal (416) 956-3698 [email protected] Andrew Grantham (416) 956-3219 [email protected] Royce Mendes (416) 594-7354 [email protected] Nick Exarhos (416) 956-6527 [email protected] QE. At this stage of the global economic recovery, what is it good for? Cynics would answer “absolutely nothing”. And judging by the impact of recent stimulus in the EZ and Japan on global growth so far, they may have a point. First quarter GDP figures are in the books for most major economies now (with Canada to come next week). And it is becoming more evident that the Eurozone and Japanese economies are benefitting from the huge stimulus measures introduced there. Eurozone growth has been steadily accelerating, reaching a respectable 0.4% pace (not annualized) in Q1. Meanwhile Japanese GDP growth earlier this week handily beat expectations, posting a 2.4% annualized pace. But that growth is being aided by massive currency depreciations, and as such appears to have come at the expense of others. GDP growth figures in the US and the UK—two areas that have seen appreciations in their trade-weighted currencies—have recently disappointed. Even though the US’ small proportion of exports relative to GDP and likely weather distortions in Q1 make us more optimistic than most for the quarter ahead, averaging out the first half of the year would show a deceleration (Chart 1). Chart 1 3 Avg GDP Growth (% SAAR) And the diminishing returns of QE can be seen more globally as well. Initial rounds of asset-buying, during and just after the Great Recession, appeared to aid acceleration in industrial production growth in both advanced and emerging markets. But more recent stimulus has failed to lift all boats. While global production accelerated in the quarters after the Fed’s QE3 announcement, the lift was very modest and it did little for growth in emerging markets. Since mid2014 (when the BoJ ramped up stimulus and the ECB started hinting at QE to come), the results have been even less decisive (Chart 2). The stimulus measures undertaken in the EZ and Japan haven’t done ”absolutely nothing”. It’s just so far we are seeing a redistribution of growth globally rather than an acceleration. The persistence of generally low inflation rates and pockets of unemployment (most notably in the EZ) suggest there is a little more room for global growth to accelerate. But that may be a story for 2016, as the stimulus in Europe and Japan trickles through to boost domestic demand, and trade with those regions’ key importers. That would support a more sustainable pick-up in cyclical stocks and commodities. Chart 2 1.2 1.0 2 Acceleration/Deceleration in Industrial Production Growth (%-pts) Three Quarters After Sep 2013 Since mid-2014 0.8 0.6 1 0.4 0.2 0.0 0 -0.2 2014 Avg http://research. cibcwm.com/res/Eco/ EcoResearch.html -1 2015 Q1 & Q2 (F) Avg EZ Jp US Source: Eurostat, BEA, ONS, SBJ, CIBC UK -0.4 World Advanced Emerging Source: CPB, CIBC CIBC World Markets Inc. • PO Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 • Bloomberg @ CIBC • (416) 594-7000 C I B C W o r l d M a r k e t s C o r p • 3 0 0 M a d i s o n A v e n u e , N e w Yo r k , N Y 1 0 0 1 7 • ( 2 1 2 ) 8 5 6 - 4 0 0 0 , ( 8 0 0 ) 9 9 9 - 6 7 2 6 Friday May 29 Thursday May 28 Wednesday May 27 Tuesday May 26 Monday May 25 ` 8:30 AM GDP M/M GDP (annualized) (Mar) (H) (Q1) (H) (Apr) (M) (Apr) (M) (Q1) (M) (May) (H) 0.3% 0.5% -$17.8B 0.75% CIBC H, M, L = High, Medium or Low Significance 8:30 AM INDUSTRIAL PROD. PRICES M/M RAW MATERIALS M/M CURRENT ACCOUNT 10:00 AM BANK OF CANADA RATE ANNOUNCE. CANADA 0.2% 0.2% 0.75% 0.0% 2.4% 0.3% -0.9% -$13.9B 0.75% Prior (May) (May) (Apr) (Apr) (May) (May) 9:45 AM MARKIT US COMPOSITE PMI Preliminary MARKIT US SERVICES PMI Preliminary 10:00 AM NEW HOME SALES SAAR NEW HOME SALES M/M CONF.BOARD CONSUMER CONFIDENCE RICHMOND FED MANUF. INDEX (M) (May) (May) 9:45 AM CHICAGO PMI 10:00 AM MICHIGAN CONSUMER SENTIMENT Consensus Source: Bloomberg (H) (H) (H) Speaker: 2:45 PM Narayana Kocherlakota (Minneapolis) Speaker: 2:20 AM John C Williams (San Francisco) 8:30 AM GDP (annualized) (Q1 P) GDP DEFLATOR (annualized) (Q1 P) (L) (L) (M) (May 16) (May 23) (L) (H) (H) (H) (M) (L) (L) (M) (H) (H) (H) (H) (Apr) 10:00 AM PENDING HOME SALES M/M 8:30 AM CONTINUING CLAIMS INITIAL CLAIMS AUCTION: 7-YR TREASURIES $29B 7:00 AM MBA-APPLICATIONS (May 22) (Mar) (Mar) (Mar) 9:00 AM HOUSE PRICE INDEX M/M S&P CASE SHILLER INDEX S&P CASE SHILLER Y/Y Speaker: 8:10 PM Jeff Lacker (Richmond) Speaker: 12:30 PM Stanley Fischer (Fed Vice Chair) AUCTION: 52-WEEK BILLS $25B AUCTION: 5-YR TREASURIES $35B (Apr) (Apr) 8:30 AM DURABLE GOODS ORDERS M/M DURABLE GOODS ORDERS EX-TRANS M/M Speaker: 11:30 PM Stanley Fischer (Fed Vice Chair) Speaker: 9:10 AM Loretta Mester (Cleveland) AUCTION: 3-M BILLS $24B, 6-M BILLS $241B AUCTION: 4-WEEK BILLS $45B (prev) AUCTION: 2-YR TREASURIES $26B MEMORIAL DAY (Holiday) - Markets Closed UNITED STATES SAAR = Seasonally Adjusted Annual Rate Consensus -0.8% -0.1% 515K 7.1% 93.4 -1.8% 0.3% CIBC 90.0 53.0 -0.9% -0.1% 1.0% 272K 508K 5.6% 95 0.0 56.8 4.6% 0.7% -0.5% 0.5% Consensus 88.6 52.3 0.2% -0.1% 1.1% 2211K 274K -1.5% 481K -11.4% 95.2 -3.0 57.0 57.4 0.7% 173.7 5.0% 4.7% 0.3% Prior Week Ahead Calendar And Forecast CIBC World Markets Inc. The Week Ahead—May 25-29, 2015 Week Ahead’s Market Call by Nick Exarhos and Andrew Grantham The Bank of Canada has a rate decision on Wednesday, and it’s likely to stand pat at 0.75%. We aren’t looking for Governor Poloz to provide any more easing this year, and the statement should reflect some of his more upbeat views on the economic outlook in the back half of the year. On Thursday we’ll get current account data for Q1, and crude’s slide should drive a widening in the deficit to $17.8 bn—roughly four billion wider than the last quarter. Friday should bring some (relatively) better news on the GDP front. Solid gains in manufacturing and wholesaling, along with economic activity unleashed by the more seasonal weather point to a 0.3% gain in March GDP, and a resulting 0.5% growth pace for the first quarter. That would be slightly higher than both the street’s expectations, and the flat outcome forecast by the BoC. In the US, a holiday-shortened week will culminate with the first revision of Q1 GDP, which is widely expected to be downgraded well into negative territory. But barring a major surprise there, markets will likely focus more on where the economy is headed going forward. A jump in new home sales and stabilization in the trend of core durable goods orders (both released earlier in the week on Tuesday) would provide some assurance on that front. 3 CIBC World Markets Inc. The Week Ahead—May 25-29, 2015 Week Ahead’s Key Canadian Number: National Accounts—Q1 6 (Friday, 8:30 a.m.) % Canadian Real GDP 4 Nick Exarhos (416) 956-6527 2 0 GDP m/m GDP Q1 -2 CIBC MktPrior 0.3% 0.2% 0.0% 0.5% 0.2% 2.4% 13:1 13:2 13:3 13:4 14:1 14:2 14:3 14:4 15:1F Quarter/Quarter (saar) Year/Year Source: Statistics Canada, CIBC The first quarter will indeed come in softer than many would have initially expected. But, the culprit will have been as much the poor weather and a stumbling neighbour to the south as it was the “front-loaded” aspects of the oil shock. So though investment should emerge as a more significant concern in the quarters ahead, the main disappointment in Q1 will have been tied to anemic export performance, and more restrained consumer spending. The economy will have still grown by an annualized 0.5% in Q1, slightly more than the flat outcome forecast by the Bank of Canada. latest month, and retailers saw better results. March’s 0.3% gain should also mean that the handoff to the second quarter will allow us to see better readings in that quarter than we would have expected otherwise. Forecast Implications—Though Q1 will show little growth, the full impact from oil will take longer to materialize. Capital spending plans have been slashed in the oil patch, and we’re already seeing output from oil field services take a dive. Add in more severe government restraint with new provincial budgets that came into effect in April, and the middle of the year may not be much better for the Canadian economy. Part of the slight beat relative to “atrocious” expectations will have been due to a strong monthly performance in March. After unseasonably cold weather restrained two-way trade, as well as hampered activity from the Canadian consumer, the factory sector surged in the Market Impact—We’re slightly above consensus which could be supportive for the C$ while weighing on fixed income. Other Canadian Releases: Current Account—Q1 (Thursday, 8:30 a.m.) Oil’s slide is going to take the current account with it in Q1. The $5 bn deterioration in the goods trade balance is primarily driven by Canada selling its barrels of oil at reduced prices, and will be the catalyst in seeing the current account come in at a deficit of $17.8 bn. That result could have been worse, but the fall in the Canadian dollar should help narrow the services deficit, while also giving a slight lift to the income account. 4 CIBC World Markets Inc. The Week Ahead—May 25-29, 2015 Week Ahead’s Key US Number: % US Durable Goods Orders % Durable Goods Orders—April 25 (Tuesday, 8:30 a.m.) 20 m/m % change (L) 15 y/y % change (R) Andrew Grantham (416) 956-3219 15 10 -5 Durable goods, m/m ex transportation, m/m Prior 4.7% 0.3% 5 -10 0 -15 -5 -20 The combination of a stronger US$ and plunge in oil price dealt a serious blow to durable goods orders during the latter part of 2014 and into the start of this year, with machinery orders plunging by more than $3bn. The slight weakening of the currency recently and some stabilisation in rig count data suggests that the worst may now be behind us. But neither suggest a strong rebound yet. We expect that durable goods orders ex-transport will edge up by 0.3%, matching March’s tally. 30 20 0 CIBC Mkt -1.8% -0.5% 0.3% 0.5% 35 25 10 5 40 Apr-14 Jul-14 Oct-14 Jan-15 -10 Apr-15F Forecast Implications—A stabilization in ex-transport durable goods orders implies that business investment won’t be the drag on growth in Q2 that it was in Q1. However, it also doesn’t suggest that business investment will be a driver of growth during the current quarter either. A Q2 rebound remains reliant on stronger consumer spending, signs for which have remained underwhelming recently. Market Impact—We are below the consensus for the headline, but market reaction will likely be determined by any miss in the ex-transport and core capital goods orders readings. As normal, the headline reading will be influenced by a swing in transportation (specifically aircraft) orders. Those appear to have lost altitude in April, setting total durable goods orders up for a 1.8% decline. 5 CIBC World Markets Inc. The Week Ahead—May 25-29, 2015 Equity Insights Nick Exarhos Riding Market Waves on the TSX Concentrated Risk-Adjusted Value on TSX It’s been a choppy year for the TSX. Enough ink’s been spilled on oil, and a squishy global growth picture has weighed on other resource-based stocks. But many other non-commodity sectors have also put in less than impressive performances. Given the risks that Canadian oriented investors have borne this year, there’s been just a handful of sectors that have registered decent Sharpe ratios. The health care sector is at the top of the class, while infotech and consumer-focused stocks have also been standouts. With the outlook for resources still anemic for at least the medium term, investors may be better served in taking measured risks, and focusing on the sectors likely to provide the greatest risk-adjusted returns. Sharpe Ratio for TSX Sectors (Past Year) 3.0 2.5 2.0 1.5 1.0 0.5 Average for TSX 0.0 -0.5 -1.0 Source: Bloomberg, CIBC Dimmer US Outlook Denting TSX Rails (L), Bringing Valuations Closer to Longer-Term Average (R) De-railed by a Softer H1 US Outlook Better days should be ahead, but we’ll admit that the US’s performance in the first quarter—and likely through the first half as a whole—has underwhelmed us. That softer backdrop has been reflected in consensus estimates of US growth and the tamer profile for two-way trade has weighed on rail volumes in the first quarter. The railroad operators have recently seen their valuations tumble toward their longer-term averages. However, with the potential that the American economy surprises to the upside in the second half, and with freight volumes already pointing to a Q2 recovery, current woes may present an attractive entry point into stocks that had been solid performers earlier on. 3.4 Growth, % 21 3.2 20 3.0 19 2.8 18 2.6 17 2.4 2.2 Jan Feb Mar Apr May 16 20 19 18 TSX Rails: Forward PEs Avg Since 2010 17 16 15 14 13 12 11 '15 US Cons. GDP (Left) BF 12-mo PE (Right) 10 Avg 14H2 Now Source: Bloomberg, CIBC US Consumers: They’ll be Back Solid Income Underpins Consumers (L); Stragglers Among S&P 500 Consumer Stocks (R) Aggregate Wage & Salary Income 8 YoY, % 6 16 14 4 Overall Sector Returns 03/15, 12 3.8 10 2 0 8 Jan-15 Jul-13 Jan-12 2 Jul-10 4 -6 Jan-09 6 -4 Jul-07 -2 Jan-06 6 Distribution of S&P Cons Disc. YoY % Returns (Number of Firms) 0 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 A more active American consumer is a key reason we expect stronger results from the US economy. Yes, retail sales have provided serial disappointments, with consumers deciding to pocket the windfall provided by cheaper gas prices. But ever-longer payrolls mean that aggregate salary income is still up around 4% from yearago levels, even if average hourly wage growth isn’t picking up meaningfully just yet. A long left tail to the distribution of returns for consumer discretionary stocks suggests that there are still a few stragglers in the sector. Those stocks could be important beneficiaries from an acceleration in consumer spending which clocked only a middling 1.5% advance in the first quarter. If those laggards were to play catch up, the overall sector could see stronger advances ahead. Source: Bloomberg, BEA, CIBC CIBC World Markets Inc. The Week Ahead—May 25-29, 2015 Currency Currents Andrew Grantham and Royce Mendes Oil Drilling Into Rate Cut Expectations BoC Has Less of a Reason to Cut With Oil’s Rebound From a peak of over $100 per barrel last year to a trough of just above $40 earlier this year, Canada’s most important export has been on a wild ride. More recently, however, oil prices have started to recover, particularly Western Canada Select. We still believe the total impact of the oil price crash will take longer to work its way through the economy than the BoC currently expects—putting pressure on CAD in the next couple of quarters. However, with oil prices now higher than those baked into the Bank’s most recent forecast, we think the likelihood of another cut is even more remote. We’ve recently limited our forecasted depreciation for the loonie and now anticipate that USDCAD will hit 1.27 in Q3 (previously 1.29). 105 Oil Price Assumptions in Recent MPR's 90 75 60 WTI 45 WCS 30 15 0 Jul-14 Oct-14 Jan-15 Apr-15 Current Source: Statistics Canada, CIBC Transitory Nature of Slowdown Widely Discussed, But the Weather Was Not Transitory…Hopefully The minutes of April’s FOMC meeting highlighted a lot of debate over just how “transitory” the slowdown in US growth was in the first quarter of the year. “A number” weren’t convinced. Part of the problem is that, unlike last year, there isn’t one single factor to lay the blame on. In 2014, poor weather was widely blamed for the slowdown in Q1, and the economy did indeed rebound thereafter. This time there’s a combination of factors—weather again, port strike, etc. The widely expected downgrade of Q1 growth shouldn’t impact markets too much, but further evidence that the slowdown was in fact temporary (possibly starting with stronger new home sales next Tuesday) should be US$ supportive. 14 12 Number of Mentions in Minutes of Fed Apr Meetings "Transitory" "Weather" 10 8 6 4 2 0 Apr'14 Apr'15 Source: FOMC, CIBC Shopping Across the Pond US Retail Sales Volumes Lag The UK (L), Despite Greater Lift to Spending Power From Gasoline (R) Strong retail sales figures from the UK gave a little bit of a lift to Sterling just as its post-election rally was starting to wane. That’s a stark contrast to recent disappointments in US retail sales. Logically it should really be the other way around. Due to the high tax wedge, petrol (or gasoline!) prices haven’t come down anywhere near as much as they have in the US. And in terms of volumes, US retail sales aren’t as far above their pre-recession level as they are in the UK, suggesting more pent-up demand. We remain confident that US consumer spending will pick up in the months ahead, driving stronger GDP growth in the US and allowing the Fed to hike well before the BoE. That would see cable move back down close to 1.50 over the coming 3-6 months. 12 % Chg Retail Sales Volumes 10 8 -5 UK US -10 6 -15 4 -20 -25 2 0 7 0 % Chg Gasoline Price (Jun'14-Apr'15) -30 Since mid2014 vs 2007 -35 UK US Source: Statistics Canada, CIBC CIBC World Markets Inc. The Week Ahead—May 25-29, 2015 CANADIAN RELEASE AND EVENT DATES May/June 2015 MONDAY TUESDAY 18 WEDNESDAY 19 Bank of Canada Gov. Poloz speaks in Charlottetown @ 11:30 AM ET, and press conference at 1:00 PM ET VICTORIA DAY (HOLIDAY) (Markets Closed) 25 THURSDAY WHOLESALE TRADE 8:30 AM 26 2 27 9 4 IVEY PURCHASING MANAGERS’ INDEX 10:00 AM 22 RETAIL TRADE 8:30 AM (Current$) MY JAN -1.41.4 FEB 1.52.4 MAR 0.73.1 CONSUMER PRICE INDEX 8:30 AM M(NSA) Y FEB 0.91.0 MAR 0.71.2 APR -0.10.8 29 NATIONAL ACCTS 8:30 AM REAL PRICE GDPDEFLATOR %ch AR %ch AR 14:Q33.2 1.4 14:Q42.4 -2.4 15:Q1 GDP BY INDUSTRY 8:30 AM (2002$) GDPIND.PROD. MM JAN-0.2-0.3 FEB 0.0-0.4 MAR PAYROLL EMPLOYMENT, EARNINGS & HOURS 8:30 AM 5 LABOUR FORCE SURVEY 8:30 AM AVG EMPLOYUNEMP HRLY (HSHOLD) RATEEARN MY%Y MAR 0.20.8 6.81.9 APR -0.10.8 6.82.4 MAY LABOUR PRODUCTIVITY 8:30 AM 11 12 BUSINESS CONDITIONS SURVEY 8:30 AM CAPACITY UTILIZATION 8:30 AM LEVEL (%) TOTALMANUF. 14:Q383.2 83.4 14:Q483.6 83.7 15:Q1 BUILDING PERMITS ($) 8:30 AM M M (RES)(NON-RES) FEB 2.2-5.0 MAR 6.622.1 APR SURVEY OF MANUFACTURING 8:30 AM SHIPMENTS M Y FEB -2.2-2.4 MAR 2.90.3 APR INDUSTRIAL PRICES 8:30 AM M(NSA) Y FEB 1.8-1.5 MAR 0.3-1.8 APR QUARTERLY FINANCIAL STATISTICS 8:30 AM 10 HOUSING STARTS 8:15 AM 000’s (AR) TOTAL SINGLES MAR190 52 APR182 58 MAY 15 28 BALANCE OF INT’L PAYMENTS 8:30 AM CURR. ACCT. BAL. $BN(QR) $BN(AR) 14:Q3 -9.6 -38.4 14:Q4-13.9 -55.7 15:Q1 3 INTERNATIONAL RESERVES 8:15 AM $BN $BN CHANGELEVEL MAR 2.91377.7 APR 0.16277.8 MAY MERCHANDISE TRADE 8:30 AM $MN 12 MO. BALANCE FEB-2,215 -81 MAR -3,019-4,350 APR 8 21 20 Bank of Canada Interest Rate Announcement 1 FRIDAY NEW HOUSING PRICE INDEX 8:30 AM 16 INT’L TRANSACTIONS IN SECURITIES C$BN, NET 8:30 AM BONDS MONEY S TOCKSTOT MARKET FEB 9.9 -2.21.69.4 MAR21.0 -5.3 6.8 22.5 APR 17 WHOLESALE TRADE 8:30 AM 18 19 RETAIL TRADE 8:30 AM (Current$) MY FEB 1.52.4 MAR 0.73.1 APR CONSUMER PRICE INDEX 8:30 AM M(NSA) Y MAR 0.71.2 APR -0.10.8 MAY All data seasonally adjusted except where noted “NSA”. M: per cent change from previous month. Q: per cent change from previous quarter at annual rates. Y: per cent change from year earlier. AR: Annual Rate. YTD: Year to date. Release dates are provided by sources outside CIBC World Markets Inc. Dates are subject to change. Sources for historical data: Statistics Canada, CMHC, Human Resources Development Canada and the Bank of Canada. 8 CIBC World Markets Inc. The Week Ahead—May 25-29, 2015 U.S. RELEASE AND EVENT DATES May/June 2015 MONDAY TUESDAY 18 WEDNESDAY 19 HOUSING STARTS 8:30 AMMIL (AR) M FEB 0.900-16.7 MAR0.944 4.9 APR 1.13520.2 THURSDAY FRIDAY 21 20 PHILADELPHIA FED INDEX 10:00 PM EXISTING HOME SALES 10:00 AM FOMC Minutes LEADING INDICATOR 10:00 AM 2,5,7-Yr NOTE ANNOUNCEMENT BOT (9:00) REDBOOK (8:55) 25 MEMORIAL DAY (HOLIDAY) (Markets Closed) 26 28 27 DURABLE GOODS ORDERS 8:30 AM M Y FEB -1.40.5 MAR 4.00.7 APR ISM MFG SURVEY 10:00 AM COMP. PRICES INDEXINDEX MAR APR MAY 51.539.0 51.540.5 2,5,7-Yr NOTE SETTLEMENT 2-Yr NOTE AUCTION 5-Yr NOTE AUCTION CONSUMER CONFIDENCE 10:00 AM BOT (9:00) REDBOOK (8:55) 2 FACTORY ORDERS 10:00 AM M(SA) Y(NSA) FEB -0.1-4.6 MAR 2.1-4.0 APR LIGHT VEHICLES SALES MIL (AR) Y MAR 17.0543.8 APR 16.4613.1 MAY 7-Yr NOTE AUCTION GOODS & SERV. BALANCE (BOP) $B 8:30 AM GDS SERV TOT FEB -55.7 19.8-35.9 MAR -70.6 19.2-51.4 APR ISM NON-MFG SURVEY 10:00 AM Beige Book 10-Yr NOTE AUCTION CONSUMER CREDIT 3:00 PM 11 12 PPI 8:30 AM M (SA) Y (NSA) MAR0.2 -0.8 APR-0.4 -1.3 MAY BUSINESS INVENTORIES 10:00 AM 30-Yr BOND AUCTION MICHIGAN SENTIMENT (P) 9:55 AM INITIAL JOBLESS CLAIMS (8:30) 16 17 HOUSING STARTS 8:30 AMMIL (AR) M MAR0.944 4.9 APR 1.13520.2 MAY 18 CPI M(SA) Y (NSA) MAR0.2 -0.1 APR MAY CURRENT ACCOUNT BAL. 8:30 AM 8:30 AM 19 LEADING INDICATOR 10:00 AM FOMC Rate Decision NET CAPITAL INFLOWS TICS 4:00 PM 5 EMPLOY. SITUATION 8:30 AM NON- CIVAVG FARMUNEMP HRLY PAYROLL RATE EARN (000s)M % Y MAR855.51.9 APR 2235.41.9 MAY RETAIL SALES 8:30 AM M Y MAR 1.11.7 APR 0.00.9 MAY 10 BOT (9:00) REDBOOK (8:55) CAPACITY UTIL/ IND. PROD. 9:15 AM LEV M Y MAR 78.6-0.3 2.3 APR 78.2-0.3 1.9 MAY 3, 10-Yr NOTE ANNOUNCEMENT 3-Yr BOND ANNOUNCEMENT TREASURY BUDGET 2:00 PM 15 4 NON-FARM PRODUCTIVITY 8:30 AM Q/Q (AR) Y/Y 14:Q4 (R) -2.1 -0.1 15:Q1 (P) -1.9 0.6 15:Q1 (R) CHICAGO PMI 9:45 AM MICHIGAN SENTIMENT (F) 9:55 AM INITIAL JOBLESS CLAIMS (8:30) 9 3-Yr NOTE AUCTION INITIAL JOBLESS CLAIMS (8:30) 3 ADP SURVEY 8:15 AM BOT (9:00) REDBOOK (8:55) 8 29 GDP 8:30 AM (AR) REAL IMPLICIT GDPDEFLATOR 14:Q4(F)2.2 0.2 15:Q1(A)0.2 -0.1 15:Q1(P) CORPORATE PROFITS 8:30 AM NEW HOME SALES 10:00 AM 1 Fed Chair Yellen speaks on economic outlook at 1:00 PM ET in Rhode Island INITIAL JOBLESS CLAIMS (8:30) S&P/CASE-SHILLER HOUSE PRICE INDEX 9:00 AM PERS. INC & OUT. 8:30 AM SAVING INCOMECONS RATE M MAR FEB0.40.25.7 MAR 0.00.45.3 APR 22 CPI 8:30 AM M(SA) Y (NSA) FEB 0.20.0 MAR 0.2-0.1 APR 0.1-0.2 Fed Chair Yellen speaks BOT (9:00) REDBOOK (8:55) PHILADELPHIA FED INDEX 10:00 PM 2,5,7-Yr NOTE ANNOUNCEMENT INITIAL JOBLESS CLAIMS (8:30) All data seasonally adjusted except where noted “NSA”. M: per cent change from previous month. Q: per cent change from previous quarter at annual rates. Y: per cent change from year earlier. AR: Annual Rate. YTD: Year to date. Release dates are provided by sources outside CIBC World Markets inc. Dates are subject to change. Sources for historical data: U.S. Department of Commerce, U.S. Department of Labor and U.S. Federal Reserve Board. 9 CIBC World Markets Inc. The Week Ahead—May 25-29, 2015 This report is issued and approved for distribution by (a) in Canada, CIBC World Markets Inc., a member of the Investment Industry Regulatory Organization of Canada, the Toronto Stock Exchange, the TSX Venture Exchange and a Member of the Canadian Investor Protection Fund, (b) in the United Kingdom, CIBC World Markets plc, which is regulated by the Financial Services Authority, and (c) in Australia, CIBC Australia Limited, a member of the Australian Stock Exchange and regulated by the ASIC (collectively, “CIBC”) and (d) in the United States either by (i) CIBC World Markets Inc. for distribution only to U.S. Major Institutional Investors (“MII”) (as such term is defined in SEC Rule 15a-6) or (ii) CIBC World Markets Corp., a member of the Financial Industry Regulatory Authority. U.S. MIIs receiving this report from CIBC World Markets Inc. 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The information and any statistical data contained herein were obtained from sources that we believe to be reliable, but we do not represent that they are accurate or complete, and they should not be relied upon as such. All estimates and opinions expressed herein constitute judgments as of the date of this report and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, Internet web sites. CIBC has not reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the recipient’s convenience and information, and the content of linked third-party web sites is not in any way incorporated into this document. Recipients who choose to access such third-party web sites or follow such hyperlinks do so at their own risk. © 2015 CIBC World Markets Inc. All rights reserved. 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